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KIGALI (Reuters) - Tigo Rwanda, a telecom brand owned by Millicom Cellular International (MIC), on Friday launched its mobile money services in Rwanda, targeted at subscribers with limited or no access to banking services.
Tigo Rwanda is the second mobile company to launch such a service after South Africa-based MTN's local unit launched its mobile money product in February 2010, acquiring about 260,000 subscribers by March this year.
Tigo has similar services in Ghana and Tanzania.
Rwanda's rural areas have limited access to financial services, with the central bank saying only 1.7 million deposit accounts had been registered by December 2010 out of a population of 9 million.
With about 3.3 million mobile subscribers shared between MTN and Tigo as of January this year, Rwandan mobile users can utilise the technology to deposit and withdraw money and can pay electricity bills and school fees via text messages.
"Tigo Cash is basically a wallet on your mobile phone. You don't have to have a bank account," said Tom Gutjahr, Tigo Rwanda's chief executive.
Licensed to operate in Rwanda two years ago, MCL said Tigo Cash can send between $1 and $550.
John Sebabi, head of payment systems at Rwanda's central bank, said the new service would deepen financial services.
"If the number of mobile phone exceeds that of bank accounts, then access to financial services is growing which is line with our objectives of increasing access to such services," he said.
Mobile operators in east Africa handle tens of millions of dollars worth of transactions in a region where a minority of people hold bank accounts and the banking infrastructure in rural areas remains limited.
MTN Rwanda says it has transferred more than $22 million dollars in mobile payments since February 2010 and is targeting 300,000 subscribers by the end of this year.